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Republic Services Inc (NYSE:RSG)
Beneish M-Score
-2.72 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Republic Services Inc has a M-score of -2.72 suggests that the company is not a manipulator.

RSG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.03   Max: -0.5
Current: -2.72

-3.03
-0.5

During the past 13 years, the highest Beneish M-Score of Republic Services Inc was -0.50. The lowest was -3.03. And the median was -2.73.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Republic Services Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9723+0.528 * 0.94+0.404 * 0.9976+0.892 * 1.0336+0.115 * 0.9732
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0151+4.679 * -0.0429-0.327 * 1.0085
=-2.72

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $935 Mil.
Revenue was 2248.6 + 2290.2 + 2344 + 2311.4 = $9,194 Mil.
Gross Profit was 867.2 + 886.5 + 953.8 + 891 = $3,599 Mil.
Total Current Assets was $1,183 Mil.
Total Assets was $20,539 Mil.
Property, Plant and Equipment(Net PPE) was $7,612 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,060 Mil.
Selling, General & Admin. Expense(SGA) was $991 Mil.
Total Current Liabilities was $1,810 Mil.
Long-Term Debt was $7,555 Mil.
Net Income was 156.7 + 172.2 + 215 + 190.3 = $734 Mil.
Non Operating Income was -0.7 + 0.7 + -0.4 + 0.9 = $1 Mil.
Cash Flow from Operations was 431.5 + 355.2 + 423.3 + 405.1 = $1,615 Mil.
Accounts Receivable was $930 Mil.
Revenue was 2169.4 + 2229.1 + 2267.9 + 2229.2 = $8,896 Mil.
Gross Profit was 865.1 + 688.7 + 866.8 + 852.3 = $3,273 Mil.
Total Current Assets was $1,344 Mil.
Total Assets was $20,594 Mil.
Property, Plant and Equipment(Net PPE) was $7,447 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,005 Mil.
Selling, General & Admin. Expense(SGA) was $944 Mil.
Total Current Liabilities was $1,756 Mil.
Long-Term Debt was $7,555 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(935 / 9194.2) / (930.4 / 8895.6)
=0.10169455 / 0.10459103
=0.9723

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3272.9 / 8895.6) / (3598.5 / 9194.2)
=0.36792347 / 0.39138805
=0.94

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1183.3 + 7612) / 20539.2) / (1 - (1343.7 + 7447) / 20593.7)
=0.57177982 / 0.57313644
=0.9976

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=9194.2 / 8895.6
=1.0336

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1005.4 / (1005.4 + 7447)) / (1059.9 / (1059.9 + 7612))
=0.11894846 / 0.12222235
=0.9732

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(990.7 / 9194.2) / (944.3 / 8895.6)
=0.10775271 / 0.1061536
=1.0151

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((7554.9 + 1810.3) / 20539.2) / ((7554.5 + 1756.4) / 20593.7)
=0.45596713 / 0.45212371
=1.0085

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(734.2 - 0.5 - 1615.1) / 20539.2
=-0.0429

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Republic Services Inc has a M-score of -2.72 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Republic Services Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.97870.98122.73280.41120.96910.98581.02241.02691.00050.9978
GMI 0.99151.00571.07840.84120.99261.01491.05941.0141.05150.9114
AQI 0.98491.00071.40730.99890.99540.99340.99510.98460.99690.9982
SGI 1.07221.03441.16022.22490.98871.01060.99091.03681.04411.0372
DEPI 0.96770.97282.47750.43211.04381.00190.93410.99060.98790.9901
SGAI 0.96640.9831.16971.00210.89540.95191.00371.00311.03251.0298
LVGI 1.0311.01330.9980.93640.95631.02370.99230.98041.01071.0345
TATA -0.0557-0.0862-0.0219-0.0394-0.0397-0.0497-0.0425-0.0481-0.0489-0.0452
M-score -2.71-2.87-0.50-2.24-2.67-2.71-2.64-2.64-2.65-2.73

Republic Services Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.02691.01721.01141.00360.99871.01760.9970.99650.99960.9723
GMI 1.0141.02770.950.96791.05321.01081.04181.01750.90980.94
AQI 0.98460.99090.9980.99090.99690.99040.98370.98790.99820.9976
SGI 1.03681.04441.05231.04961.04591.04711.04231.03881.03541.0336
DEPI 0.99060.98030.970.97780.98791.00511.00531.00450.99010.9732
SGAI 0.96120.98060.93260.93951.0291.04731.07451.07011.03331.0151
LVGI 0.98040.99230.9930.98661.01071.03061.02641.03951.03451.0085
TATA -0.0481-0.0469-0.0398-0.039-0.0489-0.0506-0.0538-0.0541-0.0452-0.0429
M-score -2.63-2.63-2.63-2.62-2.65-2.67-2.70-2.72-2.73-2.72
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